Question: Problem 5-26 Components of Bond Returns Bond P is a premium bond with a coupon of 9 percent. Bond D has a coupon rate of

 Problem 5-26 Components of Bond Returns Bond P is a premium

Problem 5-26 Components of Bond Returns Bond P is a premium bond with a coupon of 9 percent. Bond D has a coupon rate of 4 percent and is currently selling at a discount. Both bonds make annual payments, have a YTM of 6 percent, and have six years to maturity. What is the current yield for Bond P and Bond D? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Current yield Bond P Bond D If interest rates remain unchanged, what is the expected capital gains yield over the next year for Bond P and Bond D? (Do not round intermediate calculations. A negative answer should be indicated by a minus sign. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Capital gains yield Bond P Bond D

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